Construction Estimate Template (Free Downloadable PDF, DOC, EXCEL)
One of the most important steps in the construction bid process is estimating the cost of the project, and a construction estimate template can make that much easier. You can’t know the exact cost of a project until it’s completed, but you want to get as close to it as possible. Between supplies, equipment, payroll, subcontractors and more, it’s all too easy to feel overwhelmed.
For complicated or expensive projects, it may be wise to hire a professional estimator. But for most projects, making a cost estimation yourself isn’t as difficult as it may seem — as long as you know what you’re doing. Luckily, our super-simple step-by-step guide to writing a construction estimate is here to help.
The easiest way to do this is through a downloadable template. We’ve created a few construction estimate templates that can help you present a clear budget estimate for any project you may have.
What Is a Construction Estimate?
A construction estimate is a document that breaks down the anticipated cost of a construction project. Project owners need these estimates to budget properly for the project, ensure a robust return on investment (ROI) and evaluate potential financial risks.
Some companies will hire a professional estimator to develop their construction estimate. The American Society of Professional Estimators (ASPE) is the oldest and largest organization of professional construction estimators. In some cases, especially if you’re making an estimate to determine the price you plan to bid on a particular contract, hiring a professional estimator can actually save you money.
However, on most standard projects, you should be able to calculate an accurate estimate on your own. Mistakes in your estimation will cost you down the line, so the best approach is to use a pre-formatted construction estimate template like the one we’ve included below.
The estimate document is also what is used to create the project’s budget, so having an accurate estimate will ensure you have the funding you need to complete the project and prevent potential funding delays down the line.
What Goes in an Estimate?
A good estimate will provide a budget that will be almost identical to the total cost at the end of the project. In order to make sure your estimate comes as close to the final cost as possible, you’ll need to figure out exactly what expenses will be incurred during the project.
That means you’ll need to outline the scope of the work required and then break down the different individual supplies, tools, labor and any other costs necessary to complete the project as described.
Below we’ve broken down each of the sections you should include in your construction estimate:
Work Date and End Date
Before anything, make sure to write down the estimated start and end date of the project. This can give an estimated timeline of how long construction will last and when the project will be completed. It’s important to include this as it shows you already have an outline of the project in your head.
Description of Work
Start by laying out what the job will require. Try to be brief and to the point — you can save the specifics for the following sections, where you’ll go into each requirement and its costs in detail. Here, you’re just giving a general overview of the work proposed.
Immediately after you summarize the project, you’ll begin detailing the project’s expenses beginning with direct costs. Direct costs are those that are directly tied to the physical development of the project. There are three main direct costs that should be included in every construction estimate: labor, materials and equipment.
Cost of Labor
Cost of labor is the estimated cost of all work required on a given project, including contractors, subcontractors, specialists, cleaning crews, etc.. In this section of the estimate, you’ll need to detail each type of labor required followed by the number of hours needed and the rate of pay per hour for each different type.
In order to accurately predict how many hours of labor a project will require, use final invoices from previous projects with similar scopes. If you’re unsure of the hourly rate for any labor needed, you can use the average wage for that position.
Cost of Materials
In this section, you’ll need to detail all of the various supplies you’ll need for your project, from things like lumber and concrete all the way down to plumbing and lighting fixtures, if applicable.
To format this section correctly, you’ll need to be clear about you each material is counted. For instance, you’ll order cement by weight but things like pipes and fittings by number. Be sure to write down the unit of measure next to the quantity of each material.
When documenting the price of each material, remember to record the price per unit, not the total. So if you’re ordering 10 pounds of concrete that costs $5.80 per pound, you’ll write $5.80, not $58.
Try to be as accurate as possible to what you need under this section, but know that materials needed are subject to change as the project progresses.
Cost of Equipment
Equipment can range from simple tools like hammers and hand drills to heavy machinery like scissor lifts and cranes.
In this section you’ll record each type of equipment you need, how many you’ll need and what each piece costs When it comes to heavy equipment, you may decide it’s more cost-effective to rent rather than buy certain machines. If that’s the case, you’ll want to record the rental price as well as the necessary rental length.
Other or Indirect Costs
After direct costs, you’ll move onto the rest of the expenses associated with the project. Indirect costs are all of the other expenses that aren’t directly related to the project’s physical construction. Those are included in the “other costs” section.
Indirect costs can include:
- Worksite security
- Onsite construction offices
- Worksite utilities (gas, electricity, telephone, internet, etc.)
- Licenses and permits
- Administrative costs
- Legal fees
List each indirect cost required along with the quantity and price of each in the same way you recorded your direct costs. Indirect material costs, like onsite office supplies, should be recorded by quantity while indirect labor costs, like worksite security, should be recorded by labor hours required.
Tax Rate and Grand Total
Make sure to include the tax rate that would be added to the project. This will depend on where you are in the country, so it’s important to research the local tax rate.
It’s incredibly important to show a grand total of the estimate in order to be as clear and open as possible. That’s why it’s important to be as accurate as you can be. Everything from the miscellaneous necessities to the projected cost of the materials will be added up and shown here.
Once everything has been observed by both you and the client make sure you both sign the appropriately labeled areas on the template where your signatures will go. This shows that you both have seen and agreed on the estimated budget of the project. It’s important to make sure the signatures are dated as well to show when the agreement had taken place.
Unforeseen costs are almost inevitable in construction. No amount of planning and preparation can predict costs incurred by delays, weather, change orders, crew illness or other extenuating circumstances.
This is why it’s important to include a contingency budget in your estimate. A contingency budget is like insurance in case of unexpected circumstances that may cause increased costs. Typically, your contingency budget should be at least 15 percent of the overall estimate.
It should be noted that the contingency budget cannot be allocated to any other part of the project and will only be used in case of unforeseen circumstances.
What Types of Estimates Are There?
Construction estimates are different depending on when they’re made. The ASPE categorizes the different types of budget estimates into five “levels.”
Level 1: Order of Magnitude
This is an extremely rough estimate that’s created before the project is fully defined. It’s determined solely based on expert opinion and previously developed project costs.
Level 2: Intermediate Estimate
The intermediate estimate is used to determine whether a project is feasible given a particular budget. Large-scale projects will use this kind of estimate to decide whether to abandon a project that may be unaffordable.
Level 3: Preliminary Estimate
A preliminary estimate is accurate enough to be the foundation of a project budget. Some projects can be approved based on a preliminary estimate alone, so it’s important to make sure everything is correct.
Level 4: Substantive Estimate
More thorough than a preliminary estimate, a substantive estimate is created by analyzing detailed project objectives, designs and deliverables that have already been finalized.
Level 5: Definitive Estimate
A definitive estimate is the most accurate estimate, as it occurs after all suppliers and subcontractors have submitted quotes. However, it’s important to note that this is still an estimate and the budget is subject to change based on any development.
What a Good Estimate Will Do
Starting a project with a thorough, accurate cost estimate will set the tone for the rest of your contract. Taking the time to record a full list of every required expense will ensure you have everything you need ahead of time, preventing costly delays and frustration for both your client and your crew.
If an estimate is too high, the project owner may balk at the cost. If it’s or too low, the competency of the contractor may be called into question. Likewise, the estimate should also be written in a way that’s clear and understandable to all stakeholders in the project, including the client.
Be sure to avoid any industry jargon that the average person is unlikely to recognize. Using a construction estimate template can also help make sure every cost is recorded in a way that’s clear and easy to understand according to your individual needs.
A well-polished estimate also helps communicate to your client that your services are high-quality and professional all the way down to the last detail.
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